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Self-Employment Tax Calculator

Estimate what you owe on freelance, contractor, or small business profit for 2026 — the Social Security and Medicare halves you now pay yourself, the portion you can deduct, and roughly what to set aside each quarter.

Tax year 2026 Official IRS and SSA figures Sources: Rev. Proc. 2025-32, SSA Last reviewed:
Business income

Revenue minus the costs you have already accounted for.

Home office, mileage, equipment, and similar Schedule C expenses.

These use up the Social Security wage base before your business income does.

Retirement and health

Reduces income tax, but never self-employment tax.

Payments already made

What this calculator estimates

When you work for yourself, nobody is paying half your Social Security and Medicare tax on your behalf. Self-employment tax is how you cover both halves. This calculator estimates that tax, the part of it you can deduct, your combined federal liability including income tax, and how much to send in with each quarterly payment.

It is the calculation that catches most new freelancers out. A $90,000 profit does not feel like a $90,000 salary, and the gap is mostly this.

How to use it

  1. Enter your business profit, then any further deductions you have not already netted off.
  2. If you also hold a job, enter those W-2 wages. They matter more than people expect — see below.
  3. Add retirement contributions and self-employed health insurance. Both reduce income tax, though neither reduces self-employment tax.
  4. Enter anything already withheld or paid so the quarterly figures reflect what is genuinely left.

How the calculation works

The starting point is not your profit but 92.35% of it. That reduction exists because an employee's Social Security and Medicare wages exclude the employer's share of FICA; scaling your profit down by 7.65% puts you on comparable footing before the combined 15.3% rate is applied.

The resulting figure is your net earnings from self-employment. From it:

  • The Social Security portion is 12.4%, but only up to the annual wage base.
  • The Medicare portion is 2.9% on everything, with no ceiling.
  • Additional Medicare Tax of 0.9% applies above the threshold for your filing status.

If you also have W-2 wages, those consume the Social Security wage base first. Someone earning $184,500 from a job and $50,000 from a side business owes no Social Security portion at all on the business income — only the Medicare 2.9%. That single rule changes the answer dramatically and is why the W-2 field is worth filling in.

Finally, half of the Social Security and Medicare portions is an above-the-line deduction that reduces your income tax. The Additional Medicare Tax is not deductible.

A worked example

A freelancer with $96,000 of gross profit and $11,000 of further deductions has $85,000 of net profit. Multiplied by 92.35%, net earnings are $78,497.50. The Social Security portion at 12.4% is $9,733.69 and the Medicare portion at 2.9% is $2,276.43, giving about $12,010 of self-employment tax — of which roughly $6,005 is deductible against income tax.

Load the example to see it alongside the income tax and quarterly figures.

Important limitations

  • This is an estimate, not a Schedule SE or a Form 1040-ES. It is sized for planning how much to set aside.
  • Quarterly payments are split evenly. If your income arrives unevenly, the annualized income installment method may reduce or remove an underpayment penalty.
  • No qualified business income deduction. The Section 199A deduction can reduce income tax on business profit substantially and is not modelled.
  • Retirement contribution limits are not enforced. Solo 401(k) and SEP IRA contributions are capped by rules tied to your earnings; enter an amount you have already confirmed is allowable.
  • No state tax. Many states tax business income, and some cities levy their own business taxes.
  • S corporation owners are a different case. Reasonable salary rules change the calculation entirely.

Frequently asked questions

Why is my profit multiplied by 92.35%?

To match how employees are treated. An employee's taxable wages already exclude the employer's 7.65% share, so the same reduction is applied to business profit before the combined rate.

I have a job as well — do I still owe this?

Possibly only part of it. Your wages use up the Social Security wage base first. If your job already reaches the base, your business income owes only the 2.9% Medicare portion instead of the full 15.3%.

When do quarterly payments become mandatory?

Generally once you expect to owe at least $1,000 after withholding and credits. You can also avoid a penalty by meeting a safe harbour based on last year's tax. Paying everything at filing time can still incur a penalty even if you pay in full.

Is there a minimum?

Yes. Under $400 of net earnings, no self-employment tax is due. The income can still be subject to income tax.

Do business deductions reduce self-employment tax?

Ordinary business expenses do, because they reduce the profit the tax is charged on. Self-employed health insurance and retirement contributions do not — they reduce income tax only.

Official sources

Related calculators

Federal Income Tax Calculator Your full return, including business income and credits. Individual taxes Payroll Tax Calculator How the same taxes split when someone employs you. Paycheck and payroll Take-Home Pay Calculator Compare a salary against contracting on a like-for-like basis. Paycheck and payroll Capital Gains Tax Calculator Tax on selling an investment or a business asset. Investment taxes

This calculator is provided for general educational and estimation purposes only. It does not constitute tax, legal, accounting, or financial advice. Tax laws and individual circumstances vary, and your actual tax liability may differ. Review official IRS guidance or consult a qualified tax professional before making tax-related decisions. Ledgerwise is not affiliated with, endorsed by, or approved by the Internal Revenue Service or any government agency.